While every program is different, the general idea is that you agree to renovate your historic property in a manner that maintains or restores its integrity. For example, to qualify for the Baltimore City program, you often need to use wood windows and doors with historic "Baltimore Bullnose" trim on all street-facing openings. For other programs, you may be required to retain certain historic interior elements of your property, such as staircases or moldings. In exchange, your are eligible for some kind of tax incentive. Depending on where your property is located, you may even be required to comply with historic standards for your renovation whether or not you are eligible for a tax incentive.
Each of the federal, state, and local tax credit programs is independent of the others— so the process varies considerably. You may be eligible to apply for more than one program, so be sure to check all your options. We've known people who have received historic tax credits from their city, state and the Federal governments.
New City is very experienced working on historic properties and completing work so that clients are eligible for tax incentives. Some information about and links to local programs are provided below. These are subject to change, so be sure to do your own research. New City can also recommend professional consultants that provide advice on historic tax credits and handle the entire application and inspection process on behalf of their clients.
State of Maryland Sustainable Communities Tax Credit Program
Maryland Sustainable Communities Tax Credit Program is administered by the Maryland Historical Trust and provides Maryland income tax credits based on a percentage of the qualified capital costs expended in the rehabilitation of a structure for the following types of projects:
- 20% credit for “certified historic structures” that are owner-occupied, single-family residences
- 20% credit for “certified historic structures” that are commercial buildings
- 25% credit for “certified historic structures” that are high-performance commercial buildings
- 10% credit for non-historic, “qualified rehabilitated structures”
Baltimore City is offering a property tax incentive program that will save thousands of dollars for owners of landmark designated properties and properties located in the city's historic districts. Properties individually included in the Baltimore City Landmark list and the National Register of Historic Places, as well as properties located within local districts and national districts will benefit. (Approximately 54,000 properties in total). The program, called the Property Tax Credit for Historic Restorations and Rehabilitations, is a 10 year, comprehensive tax credit program that helps the City in its mission to preserve Baltimore's historic neighborhoods by encouraging property owners in these districts to complete substantive rehabilitation projects. The credit is granted on the increased assessment directly resulting from qualifying improvements. The assessment subject to the tax credit is computed once and used for the entire life of the credit. The credit for projects with construction costs less than $3.5 million is 100%, and for projects with construction costs more than $3.5 million is 80% in the first five taxable years and declines by ten percentage points thereafter.
- This is Baltimore City's first tax credit designed to benefit owners of historically designated property.
- Ten-year tax credit for all renovations, interior and exterior, is the most generous in Baltimore City and will be the most comprehensive in the country.
- Credit will benefit both homeowners and businesses.
- Goal of the program is to help preserve Baltimore's neighborhoods by encouraging restoration and rehabilitation.
- Credit is fully transferrable to a new owner for the remaining life of the credit.
The Targeted Historic Preservation Assistance Amendment Act of 2006 creates a new financial incentive to help qualified low- and moderate-income homeowners in 12 historic districts pay for certified rehabilitation work.
The grants are available for exterior repairs, rehabilitation, and structural work on historic properties in the following districts: Anacostia, Blagden Alley/Naylor Court, Capitol Hill, Fourteenth Street, LeDroit Park, Mount Pleasant, Mount Vernon Square, Mount Vernon Triangle, Shaw, Strivers' Section, U Street, and Takoma Park. Work affecting public elevations of a building which make an appreciable difference in the appearance of a property is encouraged. The HPO Gallery of Homes visually records the dramatic changes possible through before and after photographs of recently-completed projects.
The grant application is a two part process. In Part I of the application, homeowners provide photographs of their house and a general description of work being proposed for funding. In response, applicants are provided confirmation by the HPO that a house is a protected property that contributes to the character of an eligible historic district, a determination on whether the proposed scope of work meets basic preservation guidelines, and recommendations on how an application might be improved. In Part 2 of the application, applicants provide a more detailed scope of work and three itemized bids by contractors. The applications are reviewed and selected by a committee appointed by the Director of the Office of Planning and the Chairman of the Historic Preservation Review Board.
